Written by Micaela Del Monte,
During the election campaign, President-elect Donald Trump stated his intention to repeal or amend regulations issued by the Obama administration. Following the 2016 elections in the USA, as well as the White House the Republicans will hold the majority in both chambers of the 115th Congress. It is thus likely that the legislative branch will work closely with the executive to achieve common objectives. Congress can always introduce and pass legislation that modifies regulations made by agencies. However, passing new legislation can be a cumbersome process, and there are tactics for the opposition to delay action, such as making points of order and tabling certain motions. As an alternative, under certain circumstances and within a specific timeframe, Congress could use an expedited procedure, laid down in the Congressional Review Act (CRA) of 1996, to overturn federal regulations passed in the closing months of the outgoing administration.
The Congressional Review Act (CRA): what it is and how it works
The CRA was passed in 1996 as part of the Small Business Regulatory Enforcement Fairness Act (SBREFA) with the aim of reasserting Congressional authority over the administration. While Members of Congress were willing to delegate administrative authority, equally they considered that the unelected administration could not operate without being politically accountable. The idea behind this was that Congress would grant rulemaking authority to the executive but it would keep the option to disapprove regulations that depart from the original intent of Congress.
With this in mind, the CRA introduced, primarily in the Senate, an expedited procedure, or ‘fast-track’ mechanism, to over-ride regulations introduced by the administration, within 60 legislative (in the House) or session (in the Senate) days of their submission to Congress and publication in the Federal Register. The Administrative Procedure Act (APA) requires agencies to publish a notice of proposed rules in the Federal Register so that interested parties can comment. A rule is considered submitted to Congress on the later date of its receipt by the Speaker of the House or its referral to Senate. For the purpose of the CRA, every day counts, including weekends and holidays, unless one or both Chambers pause for more than three days, in accordance with an adjournment resolution.
The expedited procedure is applicable to final rules, as broadly defined by the APA. A rule is defined as ‘the whole or a part of an agency statement of general or particular applicability and future effect, designed to implement, interpret, or prescribe law or policy’. In the specific case of ‘major rules’, the CRA grants Congress additional time to consider whether to overturn it or not. For the purpose of the CRA, a rule is major when the Office of Information and Regulatory Affairs (OIRA) considers it likely to have an economic impact of more than US$100 million; or to generate a substantive increase of prices for consumers, businesses or the government; or to have a significantly negative impact on employment, productivity, innovation or competition. In the case of major rules, the Comptroller General submits to the relevant committee a report assessing whether or not the agency has followed the required procedural steps, including a cost-benefit analysis.
Any Member of Congress may introduce a disapproval resolution, which has to be approved by both chambers with a simple majority and with identical text. There is no need for both chambers to pass ‘companion’ disapproval resolutions. Indeed if the Senate receives a disapproval resolution passed by the House, it can discuss its own resolution but then vote on the resolution received from the other chamber. This system enables both chambers to pass exactly the same text, and avoid a need for discussions to overcome differences between two texts.
Once adopted, the resolution is sent to the President for signature. Should the President decide to veto it, to override the veto Congress needs a two-thirds vote in both chambers. Once the disapproval resolution has been enacted, the rule concerned is nullified and its effects cease retroactively. Also, the agency is precluded from issuing the same rule or any rule ‘that is substantially’ the same, unless authorised by Congress. The act does not clarify the criteria upon which a judgement would be made to determine whether a rule should be considered substantially the same, nor does it clarify who would do so.
Pros and cons of the CRA
In theory, the President and Congress can work together through the regular legislative procedure to undo regulations introduced by the previous administration. However, the CRA has a number of procedural advantages in the Senate, including prohibiting filibusters and amendments, and limiting floor debating time to 10 hours. At committee level, if 30 Senators submit a discharge petition, the resolution of disapproval is automatically placed on the Senate floor. The CRA also promotes increased transparency over agency rulemaking activity too.
Since it is very unlikely that a President would sign a resolution of disapproval to withdraw rules put forward by their own administration, and with a super majority of two-thirds in both chambers required to over-ride a presidential veto, the Congressional Review Act is most relevant in times of transition. And after elections, when the same political party will control both the White House and Congress, CRA can be a powerful Congressional oversight instrument. It can act to dissuade a rush of last-minute regulations (or ‘midnight regulations’) that an outgoing administration commonly tries to adopt before the new administration steps in. The term ‘midnight regulation’ dates back to the 1980s, when the volume of rules in the last three months of the Carter administration increased by 40 % compared to non-election years.
There is a tendency for outgoing administrations to increase regulatory activity towards the end of their mandate, with a consequent reaction by the upcoming administration. On average, in a post-presidential-election quarter (November to January), regulatory activity increases by 17 % compared to the same period in a non-election year. Rulemaking remains an area of great interest for the incoming president: suffice to mention that one of the first acts of the Obama, Clinton and Bush administrations was to issue memoranda aimed at stopping last-minute regulations until the officials appointed by the new president were approved.
As pointed out in a recent CRS report, however, the CRA has some drawbacks too. Disadvantages include the fact that the CRA does not provide a streamlined procedure for the House of Representatives, also because a rule can only be overturned and not amended, the possibility for Congress to find alternative solutions through amendments is limited. The regular legislative process allows the legislator to instruct the administration to re-evaluate, modify or repeal the rule.
State of play and likely scenario under the 115th Congress
The CRA provides that if a rule is submitted to Congress fewer than 60 legislative or session days before it adjourns its final session sine die, a new 60-day period for congressional review starts for the incoming Congress. A recent CRS Memorandum has attempted to identify those major rules that could be subject to CRA under the new administration and Congress in January 2017. Based on the legislative calendar for the remainder of the current Congress, the 60-day timeframe could stretch back to the end of May 2016. Others estimate that it could go further back, to 16 or 23 May. The list of rules includes, amongst others, Medicare programmes, a requirement for federal contractors to provide paid sick leave for their workers; a national school-lunch programme; and food labelling rules.
Whether or not the 115th Congress will take the opportunity to review one or more rules is not certain and is a matter of political judgement. However, some elements are worth noting. Since its enactment, the CRA has been used successfully only once; in 2001, when the then-Republican Congress used it to eliminate a rule on ergonomics standards adopted months earlier by the Occupational Safety and Health Administration (OSHA) under the Clinton administration. To date, because the CRA prevents the agency from issuing a substantially similar regulation, ergonomic standards in the workplace have gone unregulated. Five CRA joint resolutions were approved by the 114th Congress but all of them were vetoed by President Obama.
Download this publication on ‘The incoming US Congress’s powers to overturn regulations of the previous administration‘ in PDF.